State’s Job Losses Offset Good News on Dip in Unemployment

California’s unemployment rate dipped to 6.3% in September, but that positive news was undercut by a drop in payroll employment that economists said reflects the weak labor market.

The unemployment rate, which is based on a survey of households, fell from a revised 6.4% in August, the state Employment Development Department reported Friday. A separate, larger survey of employers showed a decline of 15,800 payroll jobs in California. That was the biggest monthly decline this year, though economists said seasonal factors related to education jobs probably played a role. The manufacturing sector continued its slide in September, while retail employment barely budged.

What’s clear, labor market analysts said, is that although the economy continues to expand, it is growing too slowly to create much employment. California has 53,500 fewer nonfarm payroll jobs than it did in September 2001, while the nation is down nearly 1 million jobs over the same period.

“We’re just looking at a very flat labor market right now,” said UCLA economist Tom Lieser. “Employers are reluctant to commit to new hiring without firmer prospects for improved sales and profitability.... So far, it’s a jobless recovery.”

In September, the U.S. unemployment rate was 5.6%. That’s down slightly from 5.7% in August but up from 5% in September 2001. A year ago, California’s unemployment rate stood at 5.7%.

Three of the state’s industry sectors saw employment gains in September: services, which grew by a net 5,500 jobs; construction, which added 1,800; and financial services, which posted a gain of 1,600 positions.

The retail sector, which employs 2.6 million Californians, added just 700 jobs in September.

Temporary help agencies, considered a bellwether of future hiring, added 4,500 jobs last month. Analysts have been keeping a close eye on that sector because temps tend to be the first workers fired during an economic downturn and among the first to be rehired during a recovery. Compared with September 2001, the personnel supply sector still is down 12,500 jobs. But it is slowly creeping back in 2002, up 5,400 jobs since the first of the year.

“That’s a good sign,” said Howard Roth, chief economist for the state Department of Finance. “It’s the first step to hiring people” for full-time positions.

Likewise, a separate analysis of California’s travel and tourism-related industries shows those sectors are bouncing back from the shock of last year’s terrorist attacks. Although hotels and airlines still have fewer jobs than they did a year ago, the worst losses appear to be over, said Michael Bernick, director of the EDD. Meanwhile, bars, restaurants and amusement parks have all added jobs over the last year.

“A lot of the [travel and tourism] jobs we lost after Sept. 11 have come back,” Bernick said.

September’s job gains were more than offset by declines in other sectors, however, including a loss of 16,000 government jobs, most of them at public schools. Education jobs are notoriously difficult to adjust for the summer exodus and fall return of teachers.

In August, for example, the state gained a revised 14,800 jobs, led by gains in education. That kind of volatility makes analysts cautious about reading too much into a single month’s data.

Manufacturing continued its losing streak in September. The sector lost 3,500 jobs last month, its 19th decline in the last 20 months.

Southern California continued to lead the state in job creation, adding 46,700 positions in September. Over the last year, the region has added a net 17,400 jobs contrasted with a loss of 78,100 in the Bay Area, according to EDD data.

Los Angeles County’s jobless rate fell to 6.4% in September, down from 6.6% in August. Other Southern California counties showed similar declines. Orange County’s rate dipped to 4%, from 4.1% the previous month. Ventura’s September jobless rate fell to 5.7%, from 5.8%. San Bernardino’s rate declined to 5.4%, from 5.6% in August. Riverside dipped to 6.5%, from 6.6% the previous month. San Diego’s jobless rate eased to 4.1% in September, from 4.2% the previous month.

Among California counties, San Luis Obispo posted the lowest September unemployment rate at 3.2%, while Imperial County logged the highest at 22.1%.